"This was a very difficult decision to make, but after reviewing many other options since I returned to the Company in September, our financial condition leaves us no other alternative than to close these stores," Chief Executive Ed Thomas said in a statement.
CLEVELAND, Ohio -- Teen retailer The Wet Seal Inc. said it is closing 338 stores nationwide on or about Jan. 7, cutting 3,695 full- and part-time workers. That includes 10 stores and about 115 workers in Northeast Ohio, according to store employees who answered phones, but asked not to be identified.
"The company decided to proceed with the store closures after assessing its overall financial condition and the company's inability to successfully negotiate meaningful concessions from its landlords," Wet Seal said in a statement.
Wet Seal, headquartered in Foothill Ranch, California, did not identify which stores are closing, but local employees said they are the stores in: Great Northern Mall and Great Lakes Mall in Mentor, Richmond Town Square in Richmond Heights, Belden Village in Canton, Beachwood Place, Chapel Hill Mall, SouthPark Mall in Strongsville, Summit Mall in Akron, Eastwood Mall in Niles, and Southern Park Mall in Youngstown.
One employee said workers were told Friday, Jan. 3 that Saturday, Jan. 4, would be their last day of work.
An employee who answered the phone at the Easton Town Center store in Columbus said they were told their store is the only Wet Seal still open in Ohio.
The Los Angeles Times reported the official announcement followed angry social media posts by workers who taped handwritten signs to storefronts asking shoppers to boycott Wet Seal.
"Told us NOT to look for other jobs. Said we were re-modeling and getting in new product," said one poster at the Dayton Mall, according to the paper. "Took away all of our benefits including sick time and vacation which we worked for, and were told we would receive. Btw, NO SEVERANCE PAY!"
Wet Seal said the 338 stores represented about 48 percent of its net sales for the first nine months of the retailer's fiscal year. After the closures, Wet Seal will have about 173 stores in 42 states and Puerto Rico and online sales at www.wetseal.com.
"This was a very difficult decision to make, but after reviewing many other options since I returned to the company in September, our financial condition leaves us no other alternative than to close these stores," Chief Executive Ed Thomas said in a statement.
"This is an extremely difficult time for the entire Wet Seal team, and we are doing everything we can to protect the interests of all of our stakeholders, including our employees. We acknowledge and sympathize with how hard these recent events have been on our employees, both those staying with the company and especially those who are leaving the company this week," he said.
As a result of the store closures, Wet Seal expects to incur pre-tax charges of $5.4 million to $6.4 million. That includes the costs associated with inventory write-off (estimated at between $2.5 million and $3.5 million), asset impairments for fixtures, furniture and equipment at the stores ($2.2 million), and employee terminations and other one-time costs ($700,000).
"Such estimates do not include any claims or demands which may be made by the landlords of the impacted stores for unpaid rent or otherwise," the company said.
Wet Seal's shares closed at 13 cents on Wednesday, more than doubling from Tuesday's close of 6 cents per share.
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